Multi Commodity Exchange of India, MCX, is all set to issue its first initial public offering (IPO) today. Since MCX is the first Indian exchange to get listed, analysts believe that its IPO will do well. The price band has been set between Rs 860 and Rs 1,032 a share for its initial public offering that aims to raise anything between Rs 553 and Rs 663 crore.
MCX IPO's price band is Rs860 to Rs1,032 a share that aims to raise as much as Rs 660 crore. AFP
Rating agency CRISIL has assigned a 5/5 grade to the IPO, indicating strong fundamentals.The company has been growing at a CAGR of nearly 33 percent for last five years, and people expect that growth to be maintained.The company reported profits of nearly Rs 176 crore last year. In nine months of FY12, they made a PAT of nearly Rs 218 crore.
Most of the people in the market are discounting the upper band because the company on Wednesday raised Rs 96 crore via anchor investors at the upper band, which is Rs 1032 crore. Some of these investors include Blackrock, Deutsche, Kuwait investment authority and Credit Suisse.
Ravi Kapoor, managing director and head of equity- capital markets at Citigroup, which is one of the lead book-runners for the issue, said this particular IPO has the potential to open up the primary market.
“It has a very robust business model, it has management with track record, it has a profitability track growth and a potential for future growth as well as I guess the shareholders sponsors and investors are very reputed and marky,” Kapoor told CNBC-TV18 in an interview.
In the last one year over 29 IPOs were called off, while four were cancelled in January this year. Even though Kapoor feels that MCX can revive a dry IPO market, many anaylsts feel that a single IPO cannot enthuse the entire market, given the current volatility.
“Only two types of companies can enter the IPO market at current situation, those with companies with good track record, sound fundamentals and with an attractive price band and the others which are desperately in need of funds and ready to offer at a huge discount,” Prithvi Haldea of Prime Database told the Economic Times.
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